The battle for the future of Monte dei Paschi di Siena (MPS) reached a decisive turning point during yesterday’s shareholders’ meeting, resulting in the unexpected return of Luigi Lovaglio to the helm of Italy’s oldest bank. In a move that caught many market observers by surprise, Lovaglio secured the leadership role, effectively overturning expectations that a different board composition would prevail.
The victory was not merely a win for the manager, but a signal of a deepening strategic divergence between two of the bank’s most powerful shareholders: Delfin and the Caltagirone group. While the two entities have often appeared aligned in other Italian financial giants, the Luigi Lovaglio MPS board battle revealed a clear rift in their visions for the bank’s trajectory.
At the heart of the result was the decisive role of Banco BPM. Holding a Banco BPM stake of 3.7% in MPS, the institution acted as the kingmaker, casting its vote in favor of Lovaglio’s list. This support provided the necessary leverage to push Lovaglio back into the CEO chair, sidelining rival candidate Fabrizio Palermo, who had garnered support from several institutional investors, including Vanguard.
The Divergence: Delfin vs. Caltagirone
On paper, the vote suggests a “great rupture” between the holding company led by Francesco Milleri (Delfin) and the Roman-based Caltagirone group. The two groups share significant interests across the Italian financial landscape, most notably in Generali and Mediobanca. But, yesterday’s vote demonstrated that their partnership is one of convenience rather than a formal alliance.
Delfin, which holds a 17.5% stake in MPS, bet heavily on Lovaglio. For Milleri, the decision was rooted in a “pure financial investor” logic: backing the manager who delivered the most tangible results. Under Lovaglio’s previous tenure, the bank underwent a significant cleanup process, returning to profitability and strengthening its position through a strategic offer for Mediobanca.
Conversely, the Caltagirone group, which holds 13.5% of MPS, supported the outgoing board’s list. Sources close to the group suggest that Milleri is simply making his own legitimate strategic choices, emphasizing that there was never a “marriage” between the two shareholders to begin with and yesterday’s split cannot be characterized as a “divorce.”
| Shareholder | MPS Stake | Generali Stake | Strategic Stance |
|---|---|---|---|
| Delfin | 17.5% | 10.05% | Pro-Lovaglio / Growth |
| Caltagirone | 13.5% | 6.3% | Pro-Outgoing Board / Stability |
| Banco BPM | 3.7% | N/A | The “Kingmaker” / Commercial |
The Vision of an ‘Italian JPMorgan’
Delfin’s insistence on Lovaglio’s return is tied to a broader industrial ambition. By aligning MPS more closely with Mediobanca, the goal is to create a financial powerhouse capable of mirroring the scale and influence of a JPMorgan, but with a distinctly Italian identity.
From Delfin’s perspective, removing Lovaglio would have posed a significant risk to the implementation of the Mediobanca merger project. This project is estimated to generate at least 700 million euros in synergies through a subsequent spin-off process. The stability of the leadership is seen as essential to realizing these gains.
This strategic direction has found an ally in Vittorio Grilli, the president of Mediobanca. Grilli has long maintained a close relationship with Milleri and the late Leonardo Del Vecchio, and signals from “Piazzetta Cuccia” suggest strong support for Lovaglio’s return.
The Strategic Calculus of Banco BPM
While Delfin focused on industrial synergy, Banco BPM’s support for Lovaglio appears driven by a more immediate commercial necessity. The bank sought to protect its existing commercial agreements with MPS, particularly regarding asset management handled by its subsidiary, Anima Holding.
The move also hints at deeper political undercurrents. There are persistent reports in Roman political circles that elements of the government have consistently supported the bank led by Giuseppe Castagna, including the use of “golden power” to defend it against previous attempts by Unicredit. Some within the executive branch are reportedly wary of a total “en plein”—a scenario where a single interest group controls MPS, Mediobanca, and Generali.
Market Speculation and Future Risks
The redistribution of power at MPS has triggered a wave of speculation among finance observers. While the numbers from the assembly are clear, the “rumor mill” suggests several potential next steps for the Italian banking sector:
- A Return to Merger Talks: Some analysts suggest a revived interest in a full merger between Banco BPM and MPS.
- The Unicredit Factor: There is speculation that Unicredit may seek a more prominent position in the MPS shareholding structure to counter the Delfin-Mediobanca axis.
- Government Intervention: The balance between private holdings and state interests remains a volatile variable in the bank’s long-term governance.
Despite these theories, the immediate reality is reflected in the reaction at Rocca Salimbeni, where MPS employees reportedly celebrated Lovaglio’s return, signaling internal confidence in the CEO and his deputy, Pierluigi Tortora.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice.
The next critical checkpoint for Monte dei Paschi will be the presentation of the updated industrial plan under Lovaglio’s renewed mandate, which will detail the specific steps for the Mediobanca integration and the targeted synergy captures. Market participants will be watching closely to observe if the rift between Delfin and Caltagirone creates further volatility in the bank’s governance.
We invite our readers to share their perspectives on the shifting dynamics of the Italian banking sector in the comments below.
